I AM writing in response to Robbie Green’s letter in last week’s Standard.

Firstly, while of course it is good to save, I am unsure how he thinks people on low incomes, working two or three jobs or in the zero-hour gig economy, could save since many are struggling just to get by.

Last year data showed that British households have been collectively supporting their spending through reducing savings (if they had any) and taking on more debt.

Government austerity has transferred the burden on to households.

Furthermore, on the basis that one person’s spending equals another’s income - and assuming that people actually had spare money to save - if we all did it at the same time without Government spending sufficiently into the economy or a dramatic shift in the balance of trade it would decrease consumption and stifle demand which, in turn, would hurt those trying to save more.

On that basis my question to Mr Green is where does he think his income or his savings are going to come from?

Interest rates? These are determined by the Bank of England (an arm of the Treasury) and form part of its monetary policy which involves using interest rates to stabilise the economic cycle, keep inflation low and avoid recessions.

Nine years of austerity and a slowing global economy have put another recession on the cards so I am unsure how forcing private banks to increase interest rates would be a good idea.

In fact, given that monetary policy has been so ineffective in stimulating the economy since the global financial crash, alongside the damaging consequences of austerity, there only remains one other option: increased Government spending to keep the economy from spluttering to a standstill.

We need a Government prepared to act in the public interest through investment in our public and social infrastructure and action to tackle social injustice, ensure a more equitable distribution of wealth and address the biggest challenge we face – climate change.

As for Mr Green’s concerns about “borrowing”, may I point out that the state finances do not operate like a household budget.


Prue Plumridge

London Road, Maldon